Home Page > Publications > October 2010 Quick Hits - News, Trends & Analysis

Indian Offshoring Still Going Strong
We have all been reading the mad headlines that Indian tier 1 vendors are growing at double digits per year whereas the traditional big four are operating at 5 to 8%. However, it's not a fair comparison because they are operating at different stages of maturity. When you have a turnover of $30BN it is more difficult to grow by 30% than if you have revenue of $3BN, so I think its important to add a pinch of salt to all the news stories flying around, and I would even go to make the bold prediction that 3 years from now, the big Indian players will also have much lower growth rates as it becomes nearly impossible to maintain such aggressive growth in a saturated market. However, with the capital markets' current unstable period, the inevitable double dip recession will most likely entice more CIO's down the offshoring path, and thus, offshore providers should have little trouble maintaining healthy growth rates.

Why do IT service & Project Management Frameworks Often Enjoy Limited Success?
Over the past two decades we have seen frameworks like ITIL and Prince 2 grow tremendously - and for good reason, as they can help organisations develop a process driven mindset geared towards improving services across the IT landscape. As with any theory or proposed standard frameworks, one must always tailor, adopt, and change for different organisations. Not every organisation fits the same model, and I have seen many cases where companies implement a wholesale framework only to find out 18 months later that it simply doesn't match their structure. With Prince 2 and Six Sigma methodologies, there is a fine line between improving efficiency and creating too much bureaucracy. In my past experience, I've seen both quality & PMO frameworks taken to the extreme, causing delays, overhead and ultimately negative business value. People implementing and driving initiatives across a company that focuses on a PMI framework should measure success by the number of certifications attained. Rather, programme leaders should ensure that employees are measured on and rewarded by improving processes that deliver sustainable business impact.

Flexible Pricing for Outsourced Services
IT departments the world over are looking for ways to reduce costs to manage the difficult times ahead. Many IT Directors are considering offshoring, process improvements that result in efficiency gains, and adopting new delivery models to help bring down costs. Software as a service and utility-based models take much of the up-front and fixed cost out of IT spend, freeing up cash in the near-term, and allowing companies to ramp usage up and down if necessary. For example, a client gets charged on the number of calls made to a service desk, or on the number of transactions processed by a financial system. The key is finding capable suppliers that offer flexible pricing and service models. Several providers have been offering on-demand services for some time, and many more are getting into the game. In an economy where investment dollars are scarcer than sunny days in London, companies must leverage flexible delivery and pricing models to obtain (and maintain) services without breaking the bank.

 
 

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